Fortis Healthcare shares jump to 6-week high after IHH raises bid

Fortis Healthcare shares extended their best monthly gain in more than three years after IHH Healthcare Bhd and two Indian tycoons revised their offers in the race for the country's second-largest hospital chain.

The stock climbed 4.3 per cent to Rs 158.90, its highest close since March 15. Fortis shares gained 24 per cent last month, the best performance since February 2015. Asia's most-valuable hospital operator has offered to make an immediate equity investment at Rs 175 ($2.6) a share, up from its previous bid of Rs 160 apiece, and subsequently invest more after completing a due diligence. The Munjal family's Hero Enterprise Investment Office and Burman Family Office also submitted a revised proposal, raising the amount they will invest in Fortis to Rs 18 billion.

At least four suitors had expressed interest in Fortis, after private equity firm TPG-backed Manipal Health Enterprises Pvt made the first move in March. Manipal Health now has time till May 6 to revise its offer before the board meets May 10 to consider binding bids. The two Indian business families, Munjals and Burmans, have offered to invest Rs 8 billion through a preferential share allotment at Rs 167 apiece and another Rs 10 billion via issue of warrants at Rs 176 apiece.

The fight over Fortis kicked off after the shareholding of its founders, Malvinder and Shivinder Singh, slid to less than 1 per cent as lenders seized stock they’d put up as collateral. 

The brothers resigned from the board in February, a day before Bloomberg News reported they had taken at least Rs 5 billion out without board approval.

India's fraud watchdog and market regulator have since started investigations to see if there were any financial irregularities at the company.